Medicare charges and payments : data analysis, Benford’s Law and imputation of missing data

Abstract

Covered charges (Charges) and Medicare reimbursements (Payments) for various diagnoseswere recently made available on the Web. This paper provides an analysis of the relationshipbetween these two variables. In addition, we investigate the conformity of the variables toBenford’s Law and its generalizations which are a set of rules that describe the distribution ofdigits in numbers for many types of data sets. Benford’s Law is often used to help detect datathat are fraudulently created. We also investigate whether adding a subset of randomized valueswill alter its distribution of digits as analyzed through various Benford tests.